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3 Ripple Effects Of Greece Contagion

Wednesday, 28 Apr 2010 | 5:38 PM ET

On Wednesday new worries surfaced about the Greece debt crisis and whether it may be spreading across Europe.

Specifically, S&P downgraded Spain's ratings to AA with a negative outlook.

The agency said its decision was due to its expectation that the country will suffer an "extended" period of subdued economic growth.

The move Wednesday follows its reductions of Portugal and Greece, and sent shock waves through world markets.

But here at home stocks closed higher as American investors focused on the Fed’s renewed vow to keep rates low for “an extended period.”

Pete Boockvar of Miller Tabak thinks investors are not paying enough attention to the woes in Europe. Here’s why:

3 Ripple Effects Of Greece Contagion
- 35% of Eurozone GDP at risk for contraction
- Pressure on European consumers, businesses
- Global growth slowdown

Recovery on Track?
Insight on the new names that will ride the bull's next leg, Peter Boockvar, Miller Tabak.

The Greece situation is more than a 2.5% pimple on the face of euro-zone GDP, says Tabak. Portugal, Ireland, Italy, Spain and Greece make up 35% of euro zone GDP. Each of those nations will be implementing tough austerity packages - high taxes and lower spending.

Also each of those nations are seeing a higher cost of funding and at the same time a lot of the European banks are clogged with sovereign debt, he adds.

What's the trade?

It would only be prudent for the US investor to de-risk, says Tabak. We've had an extraordinary run from the March '09 low and the world is getting more dangerous right now.

I had been shortDeutsche Bank, adds Tim Seymour, but with the stock down 10% over the past month, I took a little off.



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Trader disclosure: On Apr 28, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Kelly Owns (FXE) Puts; Kelly Owns (AUY) Calls; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Finerman's Firm Is Short (IWM), (MDY), (IJR); Finerman's Firm Is Long S&P Puts; Finerman Owns (AAPL); Finerman's Firm Owns (BAC), (BAC) Leap; Finerman Owns (BAC), (BAC) Preferred; Finerman Owns (GOOG); Finerman's Firm And Finerman Own (JPM); Finerman's Firm Owns (MHK); Finerman's Firm And Finerman Own (WFC) Preferred; Finerman's Firm Owns (GLW); Seymour Owns (AAPL), (BAC), (POT); Scaramucci Owns (PFE), Skybridge Owns (PFE)

For Tim Seymour:
Seygem Asset Management Owns (POT)

For Dennis Gartman
Funds Managed By Dennis Gartman Own Gold
Funds Managed By Dennis Gartman Own (FXI)
Funds Managed By Dennis Gartman Are Short Sterling
Funds Managed By Dennis Gartman Are Short Yen
Funds Managed By Dennis Gartman Are Short Euro

For Brian Kelly
Kanundrum Capital Is Long U.S. Dollar
Kanundrum Capital Owns (TLT)
Kanundrum Capital Owns (NTES)
Kanundrum Capital Owns (AWI)
Kanundrum Capital Is Short (FDX)
Kanundrum Capital Is Short (CLF)
Kanundrum Capital Is Short (BCS)
Kanundrum Capital Is Short (DB)
Kanundrum Capital Is Short (MCO)
Kanundrum Capital Is Short (STT)
Kanundrum Capital Is Short (IVZ)
Kanundrum Capital Is Short (USO)
Kanundrum Capital Is Short (RSX)
Kanundrum Capital Is Short (EWH)
Kanundrum Capital Is Short (EWY)
Kanundrum Capital Is Short (FXI)

For Patty Edwards
Edwards Owns (DOW) For Clients
Edwards Owns (C) For Clients
Edwards Owns (BAC) For Clients
Edwards Owns (MS) For Clients
Edwards Owns (JPM) For Clients
Edwards Owns (WFC) For Clients
Edwards Owns (V) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (YHOO) For Clients
Edwards Owns (MSFT) For Clients
Edwards Owns (INTC) For Clients
Edwards Owns (SPY) For Clients
Edwards Owns (QQQQ) For Clients
Edwards Owns (GLD) For Clients
Edwards Owns (PGM) For Clients
Edwards Owns (HD) For Clients
Edwards Owns (PCL) For Clients
Edwards Owns (AAPL) For Clients
Edwards Owns (MCD) For Clients

For Jared Levy
Peak6 Investments Owns And Has An Options Position In (DOW)
Peak6 Investments Owns And Has An Options Position In (CMCSA)
Peak6 Investments Owns And Has An Options Position In (GLW)
Peak6 Investments Owns And Has An Options Position In (S)
Peak6 Investments Owns And Has An Options Position In (TLT)
Peak6 Investments Owns And Has An Options Position In (C)
Peak6 Investments Owns And Has An Options Position In (BAC)
Peak6 Investments Owns And Has An Options Position In (GS)
Peak6 Investments Owns And Has An Options Position In (JPM)
Peak6 Investments Owns And Has An Options Position In (WFC)
Peak6 Investments Owns And Has An Options Position In (V)
Peak6 Investments Owns And Has An Options Position In (COF)
Peak6 Investments Owns And Has An Options Position In (YHOO)
Peak6 Investments Owns And Has An Options Position In (MSFT)
Peak6 Investments Owns And Has An Options Position In (LOW)
Peak6 Investments Owns And Has An Options Position In (WY)
Peak6 Investments Owns And Has An Options Position In (AAPL)
Peak6 Investments Is Short And Has An Options Position In (CMCSK)

Peak6 Investments Is Short And Has An Options Position In (XLF)
Peak6 Investments Is Short And Has An Options Position In (MS)
Peak6 Investments Is Short And Has An Options Position In (MA)
Peak6 Investments Is Short And Has An Options Position In (BIDU)
Peak6 Investments Is Short And Has An Options Position In (GOOG)
Peak6 investments Is Short And Has An Options Position In (NTES)
Peak6 Investments Is Short And Has An Options Position In (HD)
Peak6 Investments Is Short And Has An Options Position In (PCL)
Peak6 Investments Is Short And Has An Options Position In (AWI)
Peak6 Investments Is Short And Has An Options Positoin In (CTXS)
Jared Levy had put in an order to buy (GS) as of Halftime Report but did not yet own shares.

For Whitney Tilson
Funds Managed By Whitney Tilson Are Short (PALM)



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